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Entergy's CEO Discusses Q1 2012 Results - Earnings Call Transcript

In addressing other concerns, utilities have agreed to give the Entergy Regional State Committee, upon unanimous vote, the authority to direct the operating companies to add projects within the Entergy region to MISO's transmission expansion plan during the 5-year transition period after the Entergy utilities join MISO. This arrangement is designed to address concerns expressed by regulators. FERC freezes its seasonal transmission cost allocations along with the additional authority to add projects to help address the stated concerns on MISO and provide a wider path for the receipt of necessary regulatory approvals and for a seamless and successful integration and realization of up to $1.4 billion to projected net customer savings over 10 years. This projected cost of benefits derived from its joining in RTO with substantial scale in a mature Day 2 market.

As you know, Day 2 refers to an RTO that includes day-ahead and real-time energy markets and uses market-based mechanisms to manage congestion. The Day 2 market brings about efficiencies by using 1 central unit commitment and dispatch based on the economics of transmission and generation resources. MISO has one in place today, SPP does not, although it has plans to. Even assuming SPP will get there, further independent third-party analysis has recently undercut the arguments of those who have opposed our proposed move to MISO. In a study prepared by the Charles Rivers Associates for SPP, SPP is the one that commissioned the study, CRA estimates that SPP members would receive $22 million in trade benefits over the 10-year span from 2013 through 2022, as a result of the Entergy and Cleco regions entry into MISO. Not only that, this study projects that those same SPP members would see an increase in net production cost of $17 million if the Entergy and Cleco regions joined SPP instead. At the retail jurisdictions, tentative result in March in Louisiana, all parties, except SPP, initially support, or do not oppose at least, the move to MISO. Hearings are scheduled to begin next week in Louisiana, and at the end of May in Arkansas, with potential decisions coming in at summer.

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